I didn't think I needed to point this out but upon consideration, I thought I probably should:

With lowered brainwave states, the mind tends to totally disregard the passage of time and thus time moves at an increasingly fast rate. Just consider normal sleep. With total unconsciousness, time seems to cease to exist. Time just sort of ... slips.

Interesting discussion. Scientifically time is only a measure of the rate of change in a system. Entropy as we perceive it is constant in most systems even when we can't see it at atomic levels. Our minds are even set to seasonal and diurnal periods which correspond to biological cycles. So what is the absence of time one might ask? In this dimension it would correspond to a state known as absolute zero. A point where subatomic particles stop and light looses photonic properties. By comparison if we are on fire we should have time moving faster right? Well, not really. Moving faster also seems to at some point slow time according the Einstein Rosenberg principal where the closer you get to the speed of light the slower time goes. Neil Degrass Dyson did a good job trying to explain this on his remake of Cosmos originally by Caral Sagan.So what does all this mean in the analysis of reality or dreams? To me it's simple. The faster any rate of change the greater the perceived flow of time. If you perceive few changes then time seems to move slower. In dreams we can move at the speed of thought so many things can change very fast. Perception of time should also speed up making it appear you can live a life in a flash when outside the dream mere seconds have passed. Greater brain activity may be proven to accelerate the perception of times passage much like faster moving particles. Conversely in the mind the lack of perceived change when dreams are not occurring might well involve the common feeling of time stopping. That feeling when you wake up of "it can't be morning yet, I just laid down". Without dreams you have no basis to judge the passage of time.

Is Lucid Dreaming the brains preparation for the next step of human evolution when we can escape the corporeal bond of our bodies?